The Conference Board Consumer Confidence Index, posting another large gain in May, is now at its highest level in eight months, according to a Tuesday report.
The Index now stands at 54.9, up from 40.8 in April, according to The Conference Board. The Present Situation Index increased to 28.9 from 25.5 last month. The Expectations Index rose to 72.3 from 51.0 in April.
The 28-point jump in confidence over April and May is the biggest two-month rally since records began in 1967, Bloomberg reports. The measure reached its lowest point ever in February, with a reading of 25.3. Consumer confidence was projected to rise to 42.6, according to the median estimate in a Bloomberg News survey of 70 economists. Forecasts ranged from 38.5 to 47.
“Continued gains in the Present Situation Index indicate that current conditions have moderately improved, and growth in the second quarter is likely to be less negative than in the first,” said Lynn Franco, director of The Conference Board Consumer Research Center, in a released statement. “Looking ahead, consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labor market and incomes will improve in the coming months. While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us.”
Consumers’ overall assessment of current-day conditions improved again. Those claiming business conditions are “good” increased to 8.7 percent from 7.9 percent. However, those claiming conditions are “bad” increased to 45.3 percent from 44.9 percent. Consumers’ appraisal of the job market was also more favorable. Those claiming jobs are “hard to get” decreased to 44.7 percent from 46.6 percent in April. Those saying jobs are “plentiful” edged up to 5.7 percent from 4.9 percent.
Consumers’ short-term outlook improved significantly in May. Those expecting business conditions will improve over the next six months increased to 23.1 percent from 15.7 percent, while those anticipating conditions will worsen declined to 17.8 percent from 24.4 percent in April.
The employment outlook was also less pessimistic. The percentage of consumers expecting more jobs in the months ahead increased to 20.0 percent from 14.2 percent, while those anticipating fewer jobs decreased to 25.2 percent from 32.5 percent. The proportion of consumers anticipating an increase in their incomes edged up to 10.2 percent from 8.3 percent.